Rules Versus Mechanisms

Joshua Gans

Chapter Chapter 7 in The Economics of Blockchain Consensus, 2023, pp 103-116 from Springer

Abstract: Abstract This chapter explores the potential of mechanisms as an alternative to rules in achieving consensus on blockchains. While rules offer simplicity, they can limit flexibility and fine-tuning. Mechanisms, on the other hand, provide greater adaptability and can enhance efficiency and sustainability. By integrating computer science and economic approaches, mechanism-based consensus protocols can offer advantages over existing Proof of Stake protocols, allowing users to manipulate trade-offs between finality and liveness. By examining the potential applications of mechanisms in both BFT and LCR-based Proof of Stake networks, the chapter highlights the expanded set of blockchain consensus options provided by these approaches.

Keywords: Rules; Mechanisms; Blockchain consensus; Proof of Stake; Mechanism design (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-33083-4_7

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DOI: 10.1007/978-3-031-33083-4_7

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